Financial experts argue that there can be no better time than now to invest your wealth into a secure life insurance plan. They argue that people who made investments in life insurance plans before the COVID-19 economic crisis are significantly better off than people who have not made such investments.
However, William Schantz contends this claim and argues that due to the current economic crises and globally high unemployment rates, many people do not have the funds to pay the premiums for a life insurance plan. According to Schantz, the wiser decision for such people at this very moment would be to cancel their life insurance policy and focus on making survival easier.
Continue reading below to learn about how one can cancel their life insurance policy.
How to Cancel a Life Insurance Policy as Per Schantz
If someone has already applied for a whole life insurance plan for over a decade and is now in dire need of money, they should immediately cancel their insurance to benefit from their accumulated amount.
Suppose a person has not been able to convince their insurance insurer to lower their payable insurance premiums and is struggling with paying the premiums. In that case, they should also focus on making life easier and should proceed with cancelling the life insurance policy.
To cancel a life insurance policy, you should follow the following steps:
1. Proceed with the Cancellation During the Free-Look Period
You are not alone if you have doubts regarding your life insurance investment during its early days. If you wish to withdraw your amount or cancel a life insurance policy, doing so becomes much easier if your investment is still in the free look period.
In the United States of America, the free look period is usually 10 to 30 days, depending on which US state you reside in. The free look period is designed for people to have more time to rethink their investment decisions. According to William Schantz, if during this period you decide to cancel the life insurance policy, you have to contact the issuer and can take back any paid fee or premium as it is.
2. Call Your Insurance Issuer if You have a Term Life Insurance
There are mainly two different life insurance policies; term life insurance and whole life insurance. If you have invested in the term life insurance policy, then the process for cancellation will be much easier for you.
You have to stop paying the insurance premiums and contact your insurance issuer. You can either submit a formal letter or make a direct call to inform the insurance company regarding the decision to cancel your life insurance policy. Usually, most companies only require the submission of a form that they provide, and the life insurance policy gets cancelled immediately after that.
3. Consult an Advisor if You have a Whole Life Insurance Plan
Whole life insurance policies are designed for an infinite period and are usually more complicated to cancel. If your whole life insurance policy has not matured for over ten years, then cancellation will do you worse than good.
According to Schantz, cancelling a whole life insurance policy before ten years will not allow you to take up any cash value that has been accrued over time. Instead, the fees you will be paying to cancel the life insurance policy will be more than the amount you will probably get back.
If you cancel your whole life insurance policy after ten years, you will be allowed to cash in the plan for a payout. However, if the loan you had applied for to pay for the life insurance policy is still unpaid, you will lose out on money after cancelling your life insurance policy.
Hence, the best plan in such a scenario will be to consult a professional financial advisor to make the most of your investment.
Final Thoughts by William Schantz
Many people are eager to cancel their life insurance policies in today’s world of economic uncertainty and low employment opportunities. According to William Schantz, if you have no way to pay the premiums, cancellation of the policy will be the wisest decision for you.